Tokenisation of Financial Assets

Tokenisation of Financial Assets

Mr. Akhilesh Tuteja

Partner, KPMG

Mr. P Vasudevan

Executive Director, Reserve Bank of India

We'll hear what's happening next but thank you so much for staying back with us and for deep diving into our next conversation coming your way and as I mentioned earlier this is a keynote and a fireside chat which is all about tokenization of financial assets and that being said before we begin the session I'd like to once again take the opportunity to thank our incredible partners again we'd like to thank our VIP lounge partner Navi, Platinum partner Zoho as well as Bureau ID and Paramotor and we'd also like to thank our gold investment partner World Gold Council. I think it takes a mammoth set of partners to come together to put up a mammoth of a fest for all of you and this indeed is the fourth edition so we're really excited but that being said let's now bring your sort of attention to our next session that's about to begin. Now first up we have with us our first speaker in fact joining us is a powerhouse of intersection if I may put it when we're talking about tech as well as trust and he's also go-to voice at some of the biggest global forums such as Global Fintech Fest 2026.

So first up we have with us Akhilesh Duteja who's a partner KPMG and joining him this afternoon we have with us someone who is steering who has been and continues to steer India's monetary destiny and is also the architect behind some of India's biggest payment breakthroughs and he's someone who commands the country's fintech and corporate strategy portfolios the very intersection the very thought of it so ladies and gentlemen we have with us none other than Mr P Vasudevan Executive Director Reserve Bank of India. So let's put our hands together and let's have a louder round of applause please help me welcome on stage Mr P Vasudevan Executive Director Reserve Bank of India, Mr Akhilesh Duteja partner KPMG. Thank you so much for joining us and before we deep dive into the fireside chat we'll have Mr P Vasudevan address this gathering.

Before we get into this conversation I'd like to invite Mr Vasudevan to first address all of you. It's my pleasure to be on stage on the GFF. I remember how the evaluation has been and last evening the numbers of how many thousands of people have actually hundreds of speakers have shown their interest, many exhibitors, many investors, the numbers were staggering and you know now it has come to a stage where the GFF is the largest and most well-placed event as well and everybody wants to have an open presence in this event and when I say the word open I also have a lot of memories of the word open.

For example, many of you are youngsters, I don't know whether it was five years in a bank branch or a service but when we were at that age when we had to go to the bank branch or a service we could not deposit a check and we could probably proceed to the GFF. We were asked to sit there and we had it open and we have to wait for our open number to be called and similarly for some other services like IP, booking, other situations we have always had a token which was given to us which we could use and then give us a service done. I am sure some of you might have visited the Amish Film Cafe in Mumbai where again you get a token and you wait for it.

The word token, when your token number gets called out number 1, 2, 3, 4, whatever token number gets called out then you suddenly have that energy to go and pick up your surveys, your packages so that you realize that it is actually an accomplishment of the subject that you are looking for. That is what word would have made me comfortable without knowing that there is a word token. Similarly, when you want to book a home, you would have given a token suddenly to fulfil your commitments.

Financial commitments you can discuss with others to make a deposit in one way or another, completing that and investing in that particular transaction. Positive, why do you want to hear the word or do you want to experience it? And when you come to the bloody good word, then you have a different experience of tokens as an organization. For example, we hear about real assets being tokenized, artworks being tokenized, multiple tokens, non-multiple tokens, even data being tokenized.

But my intention here is to talk about the financial asset organization. And when we are looking at the financial asset, we are looking at our ecosystem. But this is one area where we can have the digital market being seen in the tokenized world.

Tokenization can change the entire way we look at our digital financial ecosystem. Instantly tokenization is also the centerpiece of our conference team as well. And when I talk about tokenization, I also have a very pleasant experience to share with you the card on a pipe tokenization or the device tokenization for your card contract.

And that was a couple of years ago and it doesn't work like that. I was already interested in all the benefits and I am very interested in tokenization. The net card system ecosystem, I heard that the net ecosystem is 1.2 billion cards have been tokenized so far.

43 floors, 118 floors, 4 cars have been tokenized and 5 billion transactions have been made in tokenization. And 75 billion copies have been tokenized in a safe and secure manner. So that gives me confidence that tokenization is for the ecosystem to be safe, secure and also to take even more advantage as well.

We can discuss as we get into the chat with Ms. Bakilesh. But the point is that the experiences in all these fields do have a tokenization. And the experience here has been very, very informative and we look forward to more such engagements with you all and also learn from you about what can be done and how this can be done.

Just to put into perspective the certificates of deposit tokenization that we did, so far around 249 transactions have been done. And around, I come back to the conference room, I have about thousands and crores of rupees on me, around 70,000 crores of rupees are being handed by the certificates of deposit tokenization. And interesting aspect here is that two-thirds are in the secondary market.

One private market has been opened and the rest are in the secondary market. So the tokenization can handle anything from issuance, to trading, to settlement, everyone's resources, to services, anything and everything can be perfectly handled in a tokenized world. And when the asset gets tokenized and brought onto a blockchain or a digital treasure, we give the public domain or the private domain permission, less permission, then we also have many more things that can be brought in.

Not only we can sell or buy assets, we also have to pass on the money to the public. But when we actually put on a chain, put on a ledger, on a digital platform, we also have the benefit of moving the money as well on the ledger itself. For example, in the CB tokenization that we did, the CBDC wholesale is the one that gets out of the money settlement aspect.

So when we have both those aspects, the asset and the money on the same platform, then we can have something called as a permissible settlement. There is no such thing as a settlement gap or a settlement window. If you see, I mean, probably in the second year, we have again got many benefits.

Of course, there are some tolerances which we might be talking at this level to move those things. And second, the expectations are many. The guidance that came to me about some more discussions we have might be between the other companies.

How eager is that we can open our sandbox or even our tribe tokenization benefits. There are other ecosystems in Europe, UK, India, US, and I think Asia as well, and many other tokenization products are being tried, including across the DHA, including the bank deposit tokenization as well. There are some other aspects which we might be allowed and we can do those as well.

But I just wanted you to contribute this topic that when we have the word tokenization, it's always referred to as fulfillment of a service, giving us some security, safety, and comfort. And it's a positive way to look at this. And tokenization is for the future.

And the way we are handling this is coming out of other challenges, like the fragmentation, fractionalization, democratizing access. All those things can be limited by tokenization. I actually have to pay a price if I leave my monument around the stage without engaging with it.

So I'll stop here and go back to our conversation and try to make them follow. Thank you very much and look forward to a good interaction. Good afternoon, everyone.

When I was requested to do this session, I was told that in about 30 minutes is what you feel. I said that for something as accomplished as this was, you know, 30 minutes is too little, too much, because you may be surprised to talk to someone in five or seven minutes. Actually, possibly it will take me something like several hours.

At the same time, the questions that I have, I'm sure we can go on. I do want to make sure that I have the right audience with me, so I can keep checking to make sure that you have a digital token with you right now. If you happen to store your credit card in any app on your phone, you can save this card.

you create a token. So a token isn't something which is a complicated structure. Each one of us, most of us, actually have one or more tokens sitting in our devices either in the form of a credit card or a session in a browser or a token in the form of an authentication system.

So a token, as sir said, is fundamentally very important to drive efficiency, speed, security, management, and much, much, much more. And so when we talked about the research of the token, I got reminded that the first time I got a token, I was very excited. I said, hey, I got a token.

But then I realized that it was the worst thing because I can't ask anyone to give me a token. So I have bad habits about tokens. And not that we talked about the benefits of tokenization and all that, but I do want to go a little bit deeper into some of these aspects.

So before I do that, I would also like to ask another question. How did you get promoted in the last one year? I had been promoted. I was here exactly at the same stage in New Zealand last time.

And I was carrying my 45 million to three other people. And this time I had my token in the system. So I had to figure out a way to promote it.

And that's how I got promoted. I didn't promote you. I mean, none of them knew you.

I'm going to have to persuade you to be the president. I couldn't figure that out. It's just as simple as that.

Well, you mentioned about how you came to Boston. I mean, it is rare for regulators to come up with a new language for what we did last year. I don't know if you guys are out there in that sense.

In many cases, the regulators come from abroad. And I've talked about it in the show before. But here it seems regulators have done a very interesting work in driving innovation.

Please tell us, what are the motivations behind that? How do you balance innovation and the tokenization of tokenization? Thank you. It's a pleasure to be on this stage with you. I think it's not something that is different or difficult for us to get into these activities.

Because we haven't always pursued this subject. And many a time, as you see, many of the initiatives that were initiated, we had a situation where it was required, but there were no suitable partners or platforms coming in. So we started experimenting as well.

And over a period of time, we have been able to develop certain infrastructures and monitor the private sector, the banking ecosystem, etc. It has been a continuous process. There's nothing new.

I think there's nothing for us to be saying that we are out there. I would like to say that there's definitely a journey that we're doing. And I yesterday heard one of the participants in this venue say that RPE is the biggest thing there.

And I was so happy to hear that they are the biggest thing there. But it is a challenge, you know. We also learn by experience, not by interaction, not by having audiences like this, as to what the ecosystem is expecting.

And when we are looking at this digital public infrastructure, I think that there is a bigger picture we have to look at. Maybe we have to talk about some of the infrastructures, like the RTPL, the data, UBI, how you have that infrastructure. But ultimately, it will become a puzzle, a piece, some puzzle.

So it's all going to be connected. And small initiatives can sometimes lead to bigger things. Like we started with the wireless home TV, the retail and the wholesale.

Then going forward, we brought in blockchain and different way to reach out to the ecosystem. Then we realized that assets could also be localized. And the certificates of deposit, which I mentioned, that initially also started.

Then we, of course, offered the English and the CD. Both are on the same platform. So both are coming secular.

Now that we have tested success, and we have the ecosystem talking about this, we think that all of the classes can come in. And somewhere I think that we are learning in the process. Others are also learning from us in the process.

I don't want to take any learning courses on these things to happen. At least RBI has done a good job. It's all part of the ecospace.

The platform is so good. We enjoy being part of the community and we discuss. It is a learning for everyone.

Thank you so much, sir. You dropped a line saying that RBI is the best. I heard somebody say that.

First of all, I am a community. And second, I am inspired. Although I had a list of questions to talk to you, I find this a little bit siloed, manifesting RBI as the biggest architect.

In fact, I had to write it. In the story which I read many, many years ago, I just came to remember it. It's about the story of Lord Krishna.

And how he was glorified. So it's written in mythology. The person who actually created the whole cosmos, the universe and the structure.

Of course, you can believe it. But what you just see is the story of Vrishabharman. He had a daughter.

Her name was Sanjana. And Sanjana gets married to his son. And Sanjana says, My son is more powerful than you.

But the problem is that it's too hot. It's too shiny. I have so much of air in my body all the time.

And Sanjana goes to her father and says, You got me the best groom. But it's just too shiny. It's just too much.

I can't handle it. So Lord Krishna tells Sanjana, This is a great son. Of course, you don't want to do that.

She actually wanted to give him power. She says, no, no, no. He actually should be something.

And he apparently takes one teeth of his son. Shaves it off. He says, now this is good.

So he says, this is enough power for whatever he wants to do. He says, no, no, no. This is not a game.

I'm not going to start it. It is so valuable. And then he uses that one teeth of his son's power to actually create two things.

Which is Vrishabharman Shruti and Krishna's Sudarshan Chakra. And Krishna, the master, is sitting there. And he says, He says, there he has taken the power to keep his shiny self here.

But also create protection of that one thing. So you said that, you know, in Agnya, Agnya is actually doing a seven day job of all the innovations. But also taking a one day and creating that protection.

Which I really, really, really admire. And I actually, in what situation Agnya has been in, in what situation is actually driving innovation and yet creating that kind of protection. I have a question for you.

Agnya has done so many innovations. Like we now feel very proud about UPI and other things which he has done. But you hear people talk about why do we need UPI? We already have it done.

I'm sure you are facing the same challenges with tokenization also. You might be looking at Ecuador. So how do we really scale from where we see this great concept, technical disability, to really scale up? Yeah.

One of the points you have raised from the dawn of the sun to the issues we face when we try to come up with something new. People say that it is always existing. I just want to bring in what you said about UPI.

You are trying to be under the assumption that IPS is there why should we have UPI? People say UPI is a variety of things. So that's how life is. I always have this thought that people keep asking why? I want to actually make a point that I know many of these asset classes are digitalized or many of them are electronic or digitalized.

But we are missing out the whole and the thoughts that people have about if you have some of them. For example, when we try to avoid computerization, there was a debate about mechanization versus digitalization. Unless you do a DTR, there is no fun out of computerization.

Similarly, when you do a computerization of an asset that is already digital. See, digital is just a spot. Now, how do you make your background move faster? As I said, we have a product segment where money can be asset.

See, there is an asset in the SEC and we are taking the power of the digitalization system to the tokenized form. And also when we can actually divide, let us say, we have a piece of paper we make 100 pieces out of it and distribute it through a piece of that. That's the power of tokenization as well.

And tokenization carries your identity, your right over that asset. Everything is carried with you in a token. And the biggest part of it is when you are having these asset classes, including money, and when you have a program element being brought in, we can actually have a program of the CD and a program of the money.

Like the submissive of the asset needs to be done in an automated way of smart contracts very quickly, thereby the equipment payment and the other reductions which is going to happen seamlessly. And when some of these aspects are to be done, the money can also move easily. So there are many other challenges that are being seen in the normal digital world which can be saved or benefited from tokenization.

For example, let's say you brought a digital home of a regulator. If I say, I'm watching a particular bank or a particular asset category, and we are looking at them to have a value at the end of the day, but if that level actually goes up during the day, there could be an automated trigger at the bank level to have more collateral being brought in. So that creates a comfort.

Similarly, ABC can hold the assets, C cannot hold the assets. You can program it in such a way that it can never go to D. These are all the things that are possible in a tokenized world. You can program it in such a way that it can expire, it can go back to more than it should be, it can be transferred to include over a journey of its life.

So if I myself have an asset, it can be better managed, and this is the power of actually the programmability that is being seen. And so, I can take one more tangent example. For example, let's say traffic goes 6 years to the year I know.

Maybe it will be like last year. It's like, first quarter of this century. It means the last century.

But when I'm just sitting here on the 7th day, 10th day, 16th day, depending on whether it was low or it was okay, etc., we brought in this information system where the images move. So the entire traffic will be one, two, thousand per year, and it's all instantaneously. That's the power of this tokenized image that was seen since years.

Similarly, when we look at the CCCC, the US gold stage, and the other asset classes that are being done, I can really open up certain topics which have been discussed elsewhere about deposit tokenization. That's going to absolutely open up other classifications, and address challenges in a particular institution. We can get a lot of comfort when we do this.

I want to look at this tokenization and not just figure another investor out of it. It's much newer and much more. For example, if you have a problem of ownership verification, tokenization can help, and you can actually do an API to check whether it's white so it's the person who can get it.

Similarly, movement of collateral can be very difficult in certain situations. We can do that through the tokenized model. There was some discussion yesterday, we were looking at gold tokenization is one more area that is being explored.

There are challenges in the existing model, but I think it will be recognized. Customer demand handling, having a repository that is showing all the issues, everything is possible for the regulator for the ecosystem from the genesis level. It's something which we are going to utilize the entire financial ecosystem.

I want us to take it in such a way that this is going to transform the way we are going to manage these financial assets, maybe with the mobile phone, and then moving it along with those regulatory rules. There are many more challenges and things that we can discuss. If you ask me a question, I can respond.

Thank you so much. I want to say a few important concepts in a very short time. This concept of programming, I think this is as I asked you a question about how to put it all together.

Packaging and turning it into a smart contract. These things may seem very simple, but they are actually solving a lot more complicated problems in the non-stream part of it. I definitely think that if you can integrate tokens with programmability, and if you turn them into smart contracts and self-explanatory, and we are trying to juggle this, that is going to be a real change.

I do want to ask you a question, which you told me about just now, which is to say that if all of that is so good, why is it not? I think there must be some areas which we need to be cautious on. There must be some challenges, because there is always another side of the coin. So, tell us about the other side of the coin.

Yes, I was going to say exactly that we also look for technical precautions. We need to be actually comfortable with what we are trying to do before we go. That's why these small pilots and these things happen.

Some things are to be very clearly understood that there is this famous saying that if something is not broken, why do you want to fix it? So, there are many other segments of our ecosystem which are working very well. So, why should we try to treat them with care? Especially, people are comfortable with, say, delivering a statement in some segments. Why should we treat them with care? And we've been trying to bring some of these changes into an organized world on a different platform.

Initial thoughts are there. Collections of detailed clarity, data certainty, data privacy, data movement, concept management. Those are the challenges.

So, we need to be mindful of them. So, it's always that the benefits are there, but if we actually consult with people and try to address these problems, there are those comforts that we get. As I said, there are also special issues.

For example, there is a platform that does all those things, money localization, asset localization. So, there will be issues of customizing. And if there are two or three platforms doing similar things, how do we actually make them interoperable? So, one of the success stories of our data ecosystem has been interoperable.

So, we don't want to lose on that. So, definitely all this development should not be seen to be in cycles. Maybe in quantification or interoperability or any two-level interoperability.

Then, the risk versus cross-border. Challenges are there in the cross-border transactions. We could address that.

But again, it's all the land versus the other requirements of our data protection system need to be addressed. So, it does sound easy and simple. If it had been so simple, then people would have made it on their way.

But challenges are there. As I said, there are many other types of tokens that are available. You need to be mindful of the risks they can cause.

You know, cryptos, you know, silver coins. You need to be mindful of them. And, as you localize a project, the movement can be so fast.

Let's say, if I can localize a collateral, and that collateral was only a moment and it was zero days ago. That's very good. But if it was zero, I would have to wait for 10 or 20 hours.

So, if that program can be so fast, then I can leverage the same assets multiple times a day to increase the liberation. If we increase the liberation, how do we actually add in more issues of risk and stability? You have to be looking at that. And in some situations, if money moves so fast, and if you're not able to stop it somewhere, then that again could be an element.

So, benefits could be better liberated, better captured, if we are able to have decent clarity, if we are able to understand the requirements of different segments. One more factor I want to bring in is, when you're localizing a particular activity, for example, let us say some depositors. There are many international depositors who actually support this activity.

They deposit to the custodian, they sell to the counterparty, they make accommodations, they exchange their responsibilities. Once it's localized, it's possible to redo or re-imagine the role of all these depositors. But we want to underline there, how it also is better.

So, while the staggering thought of having everybody in one platform, removing all intermediaries is very good from a cost perspective, from a perspective of managing risk, but this issue of, what have we done to them when they have done so good to our ecosystem? Can we make their role much better? Can we have them become token service providers? Can we have tokenization as a service? All those new possibilities come up. That's the future. I'm very happy to be in a room or in a situation where it's a first world problem.

We have seen all the good things, we can see better things going forward using all these learnings. So I want us to be mindful that each of these intermediaries should feel that their role is important, but it can be transformed as well. They can be a smarter intermediary with all these benefits available.

It's something which we are going to utilize the entire financial ecosystem. good things we can see better things going forward using all these learnings. is important but it can be transformed as well. They can be a smarter intermediate with a smart token.

So these are the things we should be mindful of.

Thank you so much. Thank you so much. I think you packed in a range of issues and challenges which you need to deal with at a time. So clearly as you talked about some technical challenges, there are some operating model challenges or intermediaries.

You talked about some of those macro challenges can create with the kind of atomic transaction speed and leverage over a longerI think it makes me feel good that we need to trade this with a huge amount of optimism but also a fair amount of caution because if it was so simple, I think the world would have done it.

I know we are at the end of time but I have some very burnt question which is kind of in my mind I definitely need to get to. Is this whole thing about delivery versus payment and on the other side there will also be the initiative on CBDC.

So how do they interlink and do you see one driving one the other? And how do you see the future there?

 A very interesting point about delivery versus payment. No transaction can get completed till both legs are taken care of. So, in some segments, there is a T2 or a T1.

 In some segments, there are net batches being moved to complete this process with less liquidity that is required. DBP 1, we started with, we were very happy we moved to DBP 3 when both are net so that the impact for the individual players can be much lower.

perspective DVP 1 gives you more insights. So we may like to use DVP 1 where everything is gross and then you can check into each of the transactions. That's the power of these tokens of this computing power that's available when we can go into DVP 1 as well.

But the issue is CBDC is the money aspect that can actually move along with the asset aspect on the single platform. That's the power of this platform.

But we have to be also mindful as I said about the urge to go muchDeeper into all those things and probably end up creating more risks for ourselves by saying that can it be DVP 1, minus 1, 0, etc.

We may have the lure of data that can take us to certain levels where probably we may not have to dwell into. So there are those things, but CBDC has been one good learning for us to benefit from and basis which these other developments are all coming in.

Unified markets interface has been a good launch pad. We are hopeful to add more asset classes to it, and that will actually make the ecosystem much more big.

 But as I said, let's look at this from a fintech perspective but also from a stability perspective. Let's not try to think that this is the be all and end all. When we talked about tokens initially, when I was mentioning about the bank branch queues or the Rameshwaram cafe waiting, they were the tokens from an orderly perspective where you knew where you were.

In the line was, you know, that was about the order. But when we are talking about the financial sector, the tokenization of financial instruments, we are talking about an opportunity. So, tokenization can mean the best of both worlds in all these wide gamuts, you know.

It's a very extremely good point to end our discussion as well. And I look at this theme, very aptly named. We always talk in the monetary policy and other parlance about the capital inflows, about theImpossible Trinity.

[33:38–33:50] The impossible Trinity, that's a separate discussion. But when we talk about AI, when we talk about tokenization, when you talk about complete powers, we are talking about the Holy Trinity. And the tokenization is a centerpiece of this.

So let's make this Holy Trinity work and take it forward.

Thank you so much, sir, on that very wonderful, noble thought on Holy Trinity, which kind of completes the thing. I really wanted to have questions from the audience, but unfortunately, we have run out of time.

 With Mr. Ross and Devon is either too little or too much, it's never just enough because once he gets started, I'm sure it's very hard to kind of control the pace of how much we can go into.

I have to curtail the number of questions which I have, but before I close, I do want to tell you at the risk of also insulting some of these previous panelists here that why do they invite a real expert and a consultant or a journalist to do this fireside chat?

[34:39–34:51] Value your time, and they say if they got two experts together, we won't be able to get to stay on track, and therefore they invite a consultant who actually has very little knowledge and can actually just make sure that it gets the best of it.

[34:51–35:02] So, if I manage to get the best value of your last 30 minutes, please, please, please have a round of applause for the Swasudevan for an absolutely wonderful thing.

[35:02–35:24] I want all of you to take a note of today's date, it's 9th of September 2021. I assure you, 10 years down the line, we will all be in this room and we will be talking about asset tokenization as if it is 10x more powerful and bigger than what UPI has been.

[35:24–35:41] When UPI started, it was also a conversation like that. I think 10 years from now, this will be a conversation where tokenization will enhance the value of our markets, our economy, our capability, and moving the speed things that speed 10x.

[35:41–35:50] This conversation, and possibly we'll talk to your kids about what we did today. So, with that, thank you so much, sir, for delivering a master class.

[35:50–36:00] I just want to make one point 30 35 minutes with the consultant, I cannot pay so much, no? So, I'll express with a token of gratitude to him for his time on this stage. Thank you.